Sundial, Inc., produces two models of sunglasses: AU and NZ. The sunglasses have the following...
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Accounting
Sundial, Inc., produces two models of sunglasses: AU and NZ. The sunglasses have the following characteristics:
AU
NZ
Selling price per unit
$
480
$
480
Variable cost per unit
$
180
$
240
Expected units sold per year
75,000
25,000
The total fixed costs per year for the company are $27,360,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
Anticipated Profit _____________________
b. Assuming that the product mix is the same at the break-even point, compute the break-even point.
Break Even point __________ Units
c. If the product sales mix were to change to four pairs of AU sunglasses for each pair of NZ sunglasses, what would be the new break-even volume for Sundial, Inc.?
Break Even Point _________ Units
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